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U.S. charges five Chinese military officials with cyber espionage and theft of trade secrets

The United States has brought first-of-its kind cyber-espionage charges against five Chinese military officials accused of hacking into U.S. companies to gain trade secrets.

U.S. Attorney General Eric Holder, accompanied by, from left, U.S. Attorney for Western District of Pennsylvania David Hickton, Assistant Attorney General for National Security John Carlin, and FBI Executive Associate Director Robert Anderson, speaks at a news conference at the Justice Department in Washington, May 19, 2014. Holder was announcing that a U.S. grand jury has charged five Chinese hackers with economic espionage and trade secret theft, the first-of-its-kind criminal charges against Chinese military officials in an international cyber-espionage case. (Charles Dharapak / AP)

By Eric TuckerThe Associated Press

Mon., May 19, 2014

WASHINGTON— The United States has brought first-of-its kind cyber-espionage charges against five Chinese military officials accused of hacking into U.S. companies to gain trade secrets.

According to the indictment announced Monday, hackers targeted the U.S. nuclear power, metals and solar products industries and are accused of stealing trade secrets and economic espionage. The alleged victims are Alcoa World Alumina, Westinghouse Electric Co., Allegheny Technologies, U.S. Steel Corp., United Steelworkers Union, and SolarWorld, Attorney General Eric Holder said Monday.

“In sum, the alleged hacking appears to have been conducted for no other reason than to advantage state-owned companies and other interests in China at the expense of businesses here in the United States,” Holder told a news conference at the Justice Department. “This is a tactic that the United States government categorically denounces.”

Said Bob Anderson Jr., executive assistant director of the FBI’s criminal, cyber response and services division: “This is the new normal. This is what you’re going to see on a recurring basis.”

No officials in China were available Monday night for comment.

The charges against the Chinese military officials come on the heels of a separate worldwide operation over the weekend that resulted in the arrest of 97 people in 16 countries who are suspected of developing, distributing or using malicious software called BlackShades, Holder said. The software allows criminals to gain surreptitious control of personal computers. An announcement on those arrests was expected for later Monday in New York.

“These two cases show that we are stepping up our cyber enforcement efforts really around the globe,” Holder said, adding that the U.S. will not tolerate these activities.

U.S. officials have previously asserted that China’s army and China-based hackers had launched attacks on American industrial and military targets, often to steal secrets or intellectual property. China has said that it faces a major threat from hackers, and the country’s military is believed to be among the biggest targets of the NSA and U.S. Cyber Command.

“It is our hope that the Chinese government will respect our criminal justice system,” Holder said.

The indictment will put a greater strain on the U.S.-China relationship.

In recent months, Washington has been increasingly critical of what it describes as provocative Chinese actions in pursuit of territorial claims in disputed seas in East Asia. For its part, Beijing complains that the Obama administration’s attempt to redirect its foreign policy toward Asia after a decade of war in the Middle East is emboldening China’s neighbours and causing tension.

The hackers allegedly stole emails and other communications that could have helped Chinese firms learn the strategies and weaknesses of American companies involved in litigation with the Chinese government or Chinese firms.

Despite the ominous-sounding allegations, at least one of the firms downplayed the hacking.

“To our knowledge, no material information was compromised during this incident, which occurred several years ago,” said Monica Orbe, Alcoa’s director of corporate affairs. “Safeguarding our data is a top priority for Alcoa, and we continue to invest resources to protect our systems.”

Last September, President Barack Obama discussed cyber-security issues on the sidelines of a summit in St. Petersburg, Russia, with Chinese President Xi Jinping.

“China not only does not support hacking but also opposes it,” Premier Li Keqiang said last year in a news conference when asked if China would stop hacking U.S. websites. “Let’s not point fingers at each other without evidence but do more to safeguard cyber security.”

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